Be­ware UK’s Bribery Act

AF­TER RM600,000 was paid to a bank ac­count in De­cem­ber 2009 in Sin­ga­pore, the donor emailed the re­cip­i­ent and said: “Santa popped over early for a quick turn down (the ad­dress of the bank).”

When the pay­ment was held up by queries from the bank, the an­gry re­cip­i­ent told the donor: “Ru­dolf must have stopped to speak to the girls.”

The lat­ter’s re­sponse was: “Sorry about this, must have been an Xmas f*** up.” When the money was fi­nally trans­ferred on Christ­mas Eve, the re­cip­i­ent wrote: “Great news, Santa left his par­cel, much ap­pre­ci­ated.”

If you thought that the money was from a Rus­sian oli­garch to his son to spend for Christ­mas you were wrong. Nei­ther was it from a Chi­nese bil­lion­aire send­ing money to his son to play at the casino.

Th­ese were coded words for send­ing bribes across three con­ti­nents – Asia, Europe and the Amer­i­cas. This was part of the ev­i­dence un­cov­ered by a joint in­ves­ti­ga­tion in­volv­ing the City of Lon­don Po­lice, the Fed­eral Bureau of In­ves­ti­ga­tion (FBI) and the Spe­cial In­spec­tor Gen­eral for Afghanistan Re­con­struc­tion.

The con­tract was for a job in war-torn Afghanistan – sup­ply of RM20 mil­lion worth of bomb dis­posal equip­ment. The “donor” was a British com­pany and the re­cip­i­ent was a US-based Aus­tralian-born busi­ness­man, Robert Gan­non.

Last week, two di­rec­tors of a British de­fence firm – Robert Gil­lam, 66, and Si­mon Davies, 46 – were jailed for pay­ing a bribe to win the con­tract.

Jail­ing Gil­lam for two years, Judge Wendy Joseph QC said: “Cor­rup­tion is a cancer in com­mer­cial and pub­lic life and those that in­dulge in it can ex­pect sen­tences of im­me­di­ate cus­tody de­spite pre­vi­ous good char­ac­ter.

“There was an at­tempt to dis­guise the na­ture of the e-mails and the na­ture of the pay­ments made – the of­fend­ing was con­ducted over a sig­nif­i­cant num­ber of months and mo­ti­vated by the prospect of sig­nif­i­cant fi­nan­cial gain.

“As to harm, there’s sub­stan­tial fi­nan­cial gain to the de­fen­dant and af­ter he helped the com­pany un­der­cut a ri­val firm.”

Gil­lam was also barred from act­ing as a com­pany di­rec­tor for the next five years, and or­dered to pay RM20,000 in pros­e­cu­tion costs. Jail­ing Davis for 11 months, Judge Joseph said: “I ac­cept that his cul­pa­bil­ity is lower than that of Gil­lam, but it can only be de­scribed as a sig­nif­i­cant role.”

You may ask: “Why pay so much at­ten­tion to a British case?” With so much money be­ing spent in the UK on pur­chases such as de­fence equip­ment, soft­ware and so much money be­ing spent in pro­mot­ing tourism and trade, it’s bet­ter to be safe than sorry.

The Bribery Act 2010 was in­tro­duced to up­date and en­hance UK law on bribery in­clud­ing for­eign bribery in or­der to ad­dress bet­ter the re­quire­ments of the 1997 OECD anti-bribery con­ven­tion. It is now among the strictest leg­is­la­tion in­ter­na­tion­ally on bribery. It came into force two years later and made com­pa­nies reg­is­tered in the UK come un­der the ex­tra-ter­ri­to­rial reach of the law. The com­pa­nies will be in breach if they fail to pre­vent bribery if an em­ployee, sub­sidiary, agent or ser­vice provider pays bribes to an­other per­son any­where in the world to ob­tain or re­tain busi­ness or a busi­ness ad­van­tage.

A for­eign sub­sidiary of a UK com­pany can cause the par­ent com­pany to be­come li­able if the sub­sidiary com­mits an act of bribery in the con­text of per­form­ing ser­vices for the UK par­ent.

But that is not all. The Act cre­ates four prime of­fences:

Two gen­eral of­fences cov­er­ing the of­fer­ing, promis­ing or giv­ing of an ad­van­tage, and re­quest­ing, agree­ing to re­ceive or ac­cept­ing of an ad­van­tage;

A dis­creet of­fence of bribery of a for­eign pub­lic of­fi­cial; and

An of­fence of fail­ure by a com­mer­cial or­gan­i­sa­tion to pre­vent a bribe be­ing paid to ob­tain or re­tain busi­ness or a busi­ness ad­van­tage (should an of­fence be com­mit­ted it will be a de­fence that the or­gan­i­sa­tion has ad­e­quate pro­ce­dures in place to pre­vent im­pli­ca­tions for Malaysian com­pa­nies and even gov­ern­ment agen­cies which do busi­ness in the UK as its ter­ri­to­rial scope is ex­ten­sive. The cor­po­rate of­fence of fail­ure to pre­vent bribery in the course of busi­ness ap­plies to any rel­e­vant com­mer­cial or­gan­i­sa­tion de­fined as a body in­cor­po­rated un­der the law of the United King­dom (or United King­dom reg­is­tered part­ner­ship) and any over­seas en­tity that car­ries on a busi­ness or part of a busi­ness in the United King­dom.

A for­eign com­pany which car­ries on any part of its busi­ness in the UK could be pros­e­cuted for fail­ure to pre­vent bribery even where the bribery takes place wholly out­side the UK and the ben­e­fit or ad­van­tage to the com­pany is in­tended to ac­crue out­side the UK.

In Lon­don, many Malaysian own­ers of prop­erty have to start wor­ry­ing. Its mayor Sadiq Khan says that sale re­stric­tions will be brought in to stop Lon­don be­com­ing the world’s cap­i­tal of money laun­der­ing,

“We shouldn’t be em­bar­rassed of say­ing our homes are homes, not gold bricks for in­vest­ment for in­vestors in the Mid­dle East and Asia. I’ve got noth­ing against lux­ury prop­er­ties be­ing built in Lon­don. What we can’t have is Lon­don be­ing the world’s cap­i­tal for money laun­der­ing,” the Evening Stan­dard quoted him as say­ing.

If the money had been brought into the UK le­git­i­mately, Malaysian buy­ers will have noth­ing to worry, but those who re­mit­ted via money chang­ers un­der the havala sys­tem will have plenty to an­swer for in the crack­down.

There­fore, the mil­lion ring­git ques­tion is: “Are we will­ing to in­cor­po­rate some of th­ese clauses into our anti-cor­rup­tion laws? We wait with bated breath for the an­swers.